Endowment must be handled responsibly
After the failings of Stanford Financial, Lehman Brothers and AIG, the current economic crisis has shown us the true importance of investing in companies that follow ethical and sustainable practices. Universities, as some of the largest shareholders in the country, have a vested interest and a huge amount of influence in making sure that companies commit to socially and environmentally responsible practices.Rice for Peace is calling on Rice University to join a growing movement of schools committed to responsible endowment management. We have created a proposal asking Rice to establish an Advisory Committee for a Responsible Endowment so we can use the university's power as a shareholder to promote social and environmental responsibility. Investments in companies that guarantee ethical practices and contribute to community development will, in both the short- and long-run, be the most beneficial to growing Rice's endowment as well as its standing in the academic and international communities.
Top universities and colleges across the country like Harvard, Yale, Brown, Cornell and Duke have already created similar advisory committees and seen the benefits. Fourteen out of the top 20 schools in the country have committed to socially responsible investments by creating guidelines and establishing advisory committees. Rice currently ranks among the top 20 but not among the majority with responsible endowment practices.
Though currently no guidelines or considerations for socially responsible investments exist at Rice, a strong precedent has already been set. The Vision for the Second Century specifically sets a priority for the university to engage with the greater Houston community in a way that addresses its social and environmental challenges. In 2008, President Leebron signed on to the American College and University President's Climate Commitment, which resulted in the creation of the Director of Sustainability position and plans to increase campus use of alternative energy.
It is time to for us take the next step. The strongest commitment we can make to sustainability and community engagement is putting our money where our mouth is. Our proposal calls for a committee made up of faculty, undergraduate students, graduate students, alumni and administrators that would make recommendations for shareholder engagement strategies that could include proxy votes and resolutions related to social and environmental issues, letter-writing, investing in community development and microfinance projects.
We have already seen the success of these strategies at other schools. Universities with community engagement goals have used socially responsible investment practices to invest in community development financial institutions. In 2007, students at Macalester College convinced their school to put $500,000 of their operating budget in a community bank that helps support local entrepreneurs and promotes home ownership and affordable housing.
Other universities have used their power to promote climate change and environmental justice policies within companies, eliminate discriminatory company practices, invest in alternative energy and promote human rights. More than 50 universities have committed to divestment from companies operating in Sudan.
So far, Rice for Peace has spoken with the Student Association and representatives from the Investments and Treasurer Office. We expect feedback from the Investment Office in the first week of April, and in the coming weeks we hope to speak with the President and the Faculty Senate. We'll be asking the SA to pass a resolution that supports the initiative to create an advisory committee.
We're also calling on you - students, faculty, alumni, staff and any other members of the Rice community - to support this initiative by signing our petition and getting involved with the campaign. Please join us in demanding a responsible endowment for a sustainable and socially responsible future. Visit our table in the Rice Memorial Center in the following weeks to sign the petition and learn more. Check out the full proposal by going to the Rice for Peace Responsible Endowment Facebook page. To get involved or if you have any questions, please email us at activism@rice.edu.
Gislaine Williams is a Jones College senior.
Richard Treadwell is a Baker College junior.
Both are Co-presidents of Rice for Peace.
Rachel Kinney, Josh Levin, Heaven Chee and Margie Diddams contributed to this project.
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